Skip to 0 minutes and 6 secondsBRUCE BILLSON: We're going to look at know how. What insights, what wisdom, what knowledge do you have in your business that may be able to be deployed in a broader sense into some new markets? You might build off from the current support you provide to your customers to understand additional needs that they have to expand your services to them. It might be that your expertise in one part of a particular system or market segment has use and adaptation possibilities in other areas. We're going to look at a couple of cases here. Pacific Urethanes, they have a wonderful reputation working primarily with the oil industry, where pipelines are constructed, and also in refrigeration and temperature control.

Skip to 0 minutes and 51 secondsBut they are not only working well with the customers they have now, they are collaborating with those same customers to identify new opportunities with this specialist know how. Made in the Shade is a fascinating business. You might get sun protection from their outstanding quality products at some of the best resorts and locations around the world. But there also is going that bit further. What do you do with that client relationship in the down season, when the sun's not such an issue? Couple of great examples about expanding know how to create new niche markets and improve business opportunities for your enterprise. Let's see what we can learn. Gerard Murray, you're the technical director of Pacific Urethanes. What a great business.

Skip to 1 minute and 34 secondsBut tell us a bit about it.

Skip to 1 minute and 36 secondsGERARD MURRAY: Pacific Urethanes is a polyurethane systems house. So we develop systems blends. We blend them here. We sell those blends to people to turn into products like insulation foam, elastomers for coating the ceiling, adhesives, things like that. So we're converters. We're blenders of raw materials, which we buy from the major chemical companies. We work. We do all our own R&D. And we make products that fit or suit our customers' requirements.

Skip to 2 minutes and 9 secondsBRUCE BILLSON: It's a real niche business in that your customers are often niche businesses themselves. But you go to great lengths to tailor not only what they need, but to come up with new possibilities that they may want as part of staying ahead of your competition.

Skip to 2 minutes and 23 secondsGERARD MURRAY: We start with upstream what they need because otherwise you're going nowhere. And then, as we-- as that product beds in, we continue to work with people and try and improve the product. So it might improve it technically. It might improve it commercially. It might improve it environmentally. And if we do it right, the customer stays with us.

Skip to 2 minutes and 42 secondsBRUCE BILLSON: So you don't take on the big guns in your industry. You don't take on the big refrigeration manufacturers, the high volume customers. Big guns take those. But you take the specialists that have a particular need, for which you can find a particular solution.

Skip to 2 minutes and 57 secondsGERARD MURRAY: Yeah. Yeah. We could do the big stuff. No problem. But commercially, we're at a disadvantage because those people that are supplied-- and usually those big applications-- are also the commodity manufacturers. So they have to have their outlet, as well. But with our customers, if we do things right, then they grow, as well. And those niches become bigger and bigger. But then you've got other problems that people start wanting to take your business there.

Skip to 3 minutes and 24 secondsBRUCE BILLSON: Well, because you've got fast followers who try and emulate what you're doing and bump you out. And then you need to come up with something new and innovative again.

Skip to 3 minutes and 32 secondsGERARD MURRAY: That's right. Yeah. So there's lots of examples of that where the product might be mature, that we've got to go back and reinvent it. And then you go back and you work with that customer with the applicator and see how you can improve it.

Skip to 3 minutes and 46 secondsBRUCE BILLSON: So you've been in the business a little while. And you've got polyurethane running through your veins. So you know and find these customers? Or do they find you? How do you actually tap those niche market customers?

Skip to 3 minutes and 58 secondsGERARD MURRAY: With a network. So there's all those things. People come to us.

Skip to 4 minutes and 1 secondBRUCE BILLSON: Yeah.

Skip to 4 minutes and 2 secondsGERARD MURRAY: People have-- our customers have told other people. Your customers, as they grow, some people might leave and start their own businesses. They may be a little bit different. They mightn't be in competition with where they came from. But they need a source. And they need someone, a company, that's reliable and that will work with them. And it's a big part of what we try and do is involve that customer with the development. So they've got not an ownership--

Skip to 4 minutes and 30 secondsBRUCE BILLSON: Emotional bond.

Skip to 4 minutes and 31 secondsGERARD MURRAY: Emotional. Exactly.

Skip to 4 minutes and 32 secondsBRUCE BILLSON: Yeah.

Skip to 4 minutes and 33 secondsGERARD MURRAY: So if you've involved them, then the product's right because it's what they want. But, at the same time, it's that emotional tie to it. So if someone else comes along and says, oh, that's not such a good product, they're going to get some push-back.

Skip to 4 minutes and 44 secondsBRUCE BILLSON: So that relationship not only sustains the business you have, but also gives you a window into what? New business opportunities.

Skip to 4 minutes and 51 secondsGERARD MURRAY: Absolutely. Yeah. People will talk to people. I've got a very-- we've got a very good customer in Perth that's made certain products for a long time. A family business. They've grown and they've been successful. But then a contact of theirs is looking at an entirely different product. Where can I get some development on this? Well, speak to Pacific Urethanes. And that's now developing into a whole new application.

Skip to 5 minutes and 18 secondsBRUCE BILLSON: And you reach out well beyond Australia though. You've got quite an international presence. How do you sustain a niche business spread so widely across the globe?

Skip to 5 minutes and 29 secondsGERARD MURRAY: Well, we couldn't do it one or two of us here. We'd be travelling all the time. We'd be neglecting what we do here. And just the sheer pressure. The growth is in the region, probably more than there is in Australia. The market's mature here. There's only little bits and pieces we can do. But we've developed a network in Indonesia, Thailand, Malaysia, Vietnam. And we've had a good contact in China, in Shanghai, for a long while. So we develop those people that have a little bit of polyurethane, have the knowledge or requirements, and they build-- they become our agents, distributors.

Skip to 6 minutes and 10 secondsBRUCE BILLSON: So they're your front of house.

Skip to 6 minutes and 11 secondsGERARD MURRAY: They find. They do the face-to-face. They find that new market. And they know the area better than we would ever do. You try going into something like Hanoi and try-- where will I go for people that make insulation foam? Or where will I go for someone who wants a wear-resistant coating. You have no chance.

Skip to 6 minutes and 31 secondsBRUCE BILLSON: So to get into those expanded niche market opportunities, you find partners that are in that space already? Perhaps sharing your passion, and with some knowledge of polyurethane.

Skip to 6 minutes and 42 secondsGERARD MURRAY: A little bit of knowledge-- the ideal partner is someone that's not-- doesn't want to be a formulator--

Skip to 6 minutes and 47 secondsBRUCE BILLSON: Yeah.

Skip to 6 minutes and 47 secondsGERARD MURRAY: --at system south.

Skip to 6 minutes and 48 secondsBRUCE BILLSON: So you leave the smarts here.

Skip to 6 minutes and 50 secondsGERARD MURRAY: Yeah.

Skip to 6 minutes and 50 secondsBRUCE BILLSON: But they're the customer-facing person.

Skip to 6 minutes and 52 secondsGERARD MURRAY: Yeah.

Skip to 6 minutes and 52 secondsBRUCE BILLSON: With some insights and some networks that you can use.

Skip to 6 minutes and 55 secondsGERARD MURRAY: Yeah. So they don't want to become a competito; they will grow with that. But we will-- part of the plan would be to take those people into doing some blending locally. Rather than export everything from here, we back into the activator. The concentrate, the Coca-Cola principle.

Skip to 7 minutes and 12 secondsBRUCE BILLSON: Yeah.

Skip to 7 minutes and 13 secondsGERARD MURRAY: And we will reapply that into the region.

Skip to 7 minutes and 16 secondsBRUCE BILLSON: Well, let's just pick that out a little bit. The Coca-Cola principle is you don't export the ready to use finished product. You export the value, like the syrup--

Skip to 7 minutes and 24 secondsGERARD MURRAY: Yeah.

Skip to 7 minutes and 25 secondsBRUCE BILLSON: --and let someone else add the carbonated water.

Skip to 7 minutes and 27 secondsGERARD MURRAY: Exactly.

Skip to 7 minutes and 27 secondsBRUCE BILLSON: You do the same here. The chemistry--

Skip to 7 minutes and 29 secondsGERARD MURRAY: Yeah.

Skip to 7 minutes and 29 secondsBRUCE BILLSON: The value add piece. And then they add water in country to activate.

Skip to 7 minutes and 34 secondsGERARD MURRAY: Exactly Yeah. And that's good for everyone. It's good for us because we keep our IP there. It's good for our customer because they're not-- we're not exporting container loads of material with five tonnes of water.

Skip to 7 minutes and 46 secondsBRUCE BILLSON: Freighting water.

Skip to 7 minutes and 47 secondsGERARD MURRAY: Exactly. Well, we'd like to do that and get a good price for it.

Skip to 7 minutes and 50 secondsBRUCE BILLSON: [LAUGHS]

Skip to 7 minutes and 51 secondsGERARD MURRAY: But they buy the commodities locally. And that's competitive. So they can go to the big chemical companies and get the best deal from them. And they're selling their commodity, so most of the time it keeps them away from the downstream application. You've got to have some knowledge to start with. You can't say, oh, I fancy doing that. So, I mean, that's rather obvious. So you're not going to go into the polyurethane business if you know nothing about it. You've got to start building that network. You've got to find people to talk to. And you've got to be careful who you talk to.

Skip to 8 minutes and 25 secondsWhat you don't want is to do a lot of-- meet a lot of tyre kickers, get a lot of dead ends. And you've got to communicate. If you do a development with someone, and that person's in Perth or in Brisbane, you've got to communicate and you've got the keep things turning over. Otherwise, if they're smart people, then they'll move on to something else. They won't wait. You've got to keep feeding that. You've got to communicate with them. That's so important. You've got to know what you're doing.

Skip to 8 minutes and 56 secondsBRUCE BILLSON: Gerard, thank you for sharing your insights with us today. It's been really useful and worthwhile. Thank you.

Skip to 9 minutes and 0 secondsGERARD MURRAY: Thank you, Bruce. Good to see you again.

Skip to 9 minutes and 2 secondsBRUCE BILLSON: Some great insights there from Gerard. Now we're going to talk with Eliza, Made in the Shade, a fascinating business. Look at how and learn from the way Eliza's taken a quite seasonal business and made it a year round productive enterprise by looking at how to use the know how within the business for a broader application. Eliza Foster, Made in the Shade, what a fantastic story your business is. Tell me what made you choose high quality, precision premium umbrellas as something to throw your professional life into.

Skip to 9 minutes and 37 secondsELIZA FOSTER: I didn't actually knowingly start out to make umbrellas. We were looking for a business opportunity. And we met these people who'd been to Italy. And they fell in love with this umbrella, brought it back to Australia, pulled it to pieces, tried making them, and realised how labour intensive it was. And so they saw that as a business opportunity.

Skip to 9 minutes and 57 secondsBRUCE BILLSON: And you were up for it? You thought, this will be for us?

Skip to 10 minutes and 0 secondsELIZA FOSTER: Bought it. Yeah.

Skip to 10 minutes and 1 secondBRUCE BILLSON: You've graced covers of Elle magazine, and you're in resorts in Fiji, some of the best wineries, and in many people's homes. The niche market you spotted, was it all about the quality? All about the atmosphere? What was it that motivated you?

Skip to 10 minutes and 17 secondsELIZA FOSTER: I think because it was so unusual and different. Like, in 1979, the biggest umbrella you could see in Australia was probably a beach umbrella. And there wasn't anything like it here. Nothing like it. And I just fell in love with it. I thought, oh, these are amazing. We need these in Australia because it's so hot. And, I don't know. It just took off. We can probably make more umbrellas in a day now than we did in our first year because it's just-- it's very labour intensive. We now have a sort of machinery and equipment that helps parts of the process. Some of it's automated.

Skip to 10 minutes and 52 secondsAnd other than that, we just plod along and make all the frames in the winter and get ready for the summer.

Skip to 11 minutes and 0 secondsBRUCE BILLSON: But you're a personal-- almost a shade consultant, if I could put it that way. I know--

Skip to 11 minutes and 5 secondsELIZA FOSTER: Yeah. I suppose.

Skip to 11 minutes and 5 secondsBRUCE BILLSON: --when I purchased an umbrella through you, you're very intimately involved. And yet you know and value your customers. I mean, is that part of your strategy to be that intimate and repeat business and the referrals that come through it?

Skip to 11 minutes and 18 secondsELIZA FOSTER: Absolutely. Absolutely. Because by looking after people, you get the referrals. And most people, when they are spending more than a few hundred dollars on something, they'll ask a friend. And if the friend says, oh, get one of those umbrellas. They're the best. It's pretty hard to ignore that. The fact that you can get a 30-year-old umbrella repaired and refurbished and still use it, people are starting to embrace that now.

Skip to 11 minutes and 47 secondsBRUCE BILLSON: Because it's almost like a service. You can purchase a Made in the Shade umbrella. And then you offer a maintenance, a repair, a cleaning service, keeping it is spunky as if it was brand new. Is that part of keeping that referral channelled to the market alive and fresh?

Skip to 12 minutes and 4 secondsELIZA FOSTER: I don't know if you remember when you bought your umbrella, there would have been a little card with it.

Skip to 12 minutes and 9 secondsBRUCE BILLSON: Yeah.

Skip to 12 minutes and 10 secondsELIZA FOSTER: It would have been called a registration card.

Skip to 12 minutes and 12 secondsBRUCE BILLSON: That's right. Yeah.

Skip to 12 minutes and 13 secondsELIZA FOSTER: Do you ever wonder what they were for?

Skip to 12 minutes and 15 secondsBRUCE BILLSON: I know what that was for. So you could follow up with me--

Skip to 12 minutes and 16 secondsELIZA FOSTER: Yeah.

Skip to 12 minutes and 17 secondsBRUCE BILLSON: --to make sure my umbrella stayed in great shape.

Skip to 12 minutes and 19 secondsELIZA FOSTER: So if you ring me up in 10 years time and say you need a new canvass for your umbrella, I can tell you what size you've got.

Skip to 12 minutes and 25 secondsBRUCE BILLSON: Yeah.

Skip to 12 minutes and 26 secondsELIZA FOSTER: You don't have to tell me what size because I already know what size you've got. And so that-- knowing all the customers' details, I think, really contributes to them trusting you and knowing that you know what you're talking about.

Skip to 12 minutes and 40 secondsBRUCE BILLSON: Because you're at the premium end of the market. I mean, your umbrellas are a fantastic value, but they're not a--

Skip to 12 minutes and 45 secondsELIZA FOSTER: They're very expensive.

Skip to 12 minutes and 46 secondsBRUCE BILLSON: They are. But they're brilliant. And is that sort of customer follow up and genuine involvement in your sales a part of that premium offer that you offer people?

Skip to 12 minutes and 56 secondsELIZA FOSTER: Absolutely. Absolutely. Like, I sent a postcard out every other year.

Skip to 13 minutes and 0 secondsBRUCE BILLSON: One of these?

Skip to 13 minutes and 1 secondELIZA FOSTER: Yeah.

Skip to 13 minutes and 1 secondBRUCE BILLSON: Yeah.

Skip to 13 minutes and 2 secondsELIZA FOSTER: Just saying to people, hey, does your umbrella need some service or maintenance? Because a lot of people just forget about it and they wait until about November, December when they want to use it, and then find it's got, oh, spiders in it, or it's dirty, or-- and sending out a postcard every couple of years is not intrusive for people. But it reminds them. And they're like, oh, yeah. Let's get that spruced up a bit. Let's get it cleaned or get a new canvas on it.

Skip to 13 minutes and 30 secondsBRUCE BILLSON: So with the overseas opportunity, you're mainly at a resort level there at this stage. Is that primarily where the offshore market opportunities come from for you?

Skip to 13 minutes and 41 secondsELIZA FOSTER: At the moment, yeah. Mainly resorts. I mean, one resort that we did that I was really thrilled about was the Lacovia Condominiums in Grand Cayman, in the Cayman Islands. And apparently, they had the king of some country booked out the entire resort and had to have a shade. And we had to air freight them.

Skip to 14 minutes and 1 secondBRUCE BILLSON: Wow.

Skip to 14 minutes and 3 secondsELIZA FOSTER: So it all happened within two weeks.

Skip to 14 minutes and 6 secondsBRUCE BILLSON: That genuine passion and love of your product, is that important to have authentic conversations with niche market consumers, knowing it's a premium product? Is that a part of what you do?

Skip to 14 minutes and 19 secondsELIZA FOSTER: Well, I think it is, Bruce, because if you ask somebody about something and they are a bit wishy-washy about it, they're not believable, you know? If you really are passionate about what you're doing and you believe in it, I think it shows in the product.

Skip to 14 minutes and 36 secondsBRUCE BILLSON: You've sustained that belief for a few years.

Skip to 14 minutes and 38 secondsELIZA FOSTER: Yeah.

Skip to 14 minutes and 39 secondsBRUCE BILLSON: And you're still jazzed by it every day. What three bits of advice would you give a young entrepreneur thinking of embarking on a business journey? And particularly one focused on a niche market?

Skip to 14 minutes and 53 secondsELIZA FOSTER: Have the commitment to work really hard. Have the commitment to want to improve the product. And be passionate about what you are doing.

Skip to 15 minutes and 4 secondsBRUCE BILLSON: Well, Eliza Foster, I've loved being a part of-- a small part of the Made in the Shade journey, but thank you for sharing your insights with us today.

Skip to 15 minutes and 12 secondsELIZA FOSTER: Thanks, Bruce.

Applied know-how leading to new markets

Achieving a level of excellence in your field of endeavour can be the best platform for an SME expanding into international markets.

As demonstrated in the video, both Made in the Shade and Pacific Urethanes are examples of SMEs using their specialist expertise and know-how to expand into new markets. They’re also able to expand into new markets thanks to the demand generated by their premium quality products.

Producing a higher quality product than competitors, and following up on this point of difference with excellent customer care, can be a successful strategy for SMEs wanting to expand.

Attention to developing premium-quality products not only fosters return business from existing customers, it also generates more business through word of mouth referrals. Customers are so satisfied with their experience with the companies, they’re willing to refer their friends and colleagues.

As Eliza Foster, owner of Made in the Shade, discusses in the video: ‘by looking after people, you’ll get referrals’.

Maintaining a high level of excellence in a product or service allows SMEs to develop a network of customers and partners who can help them market their product overseas.

Your task

Having considered the case studies presented in the video, identify the particular expertise that has seen these SMEs recognised as leaders in their field and promoted as such by their customers.

Consider your SME or one you’re familiar with and share in the comments any particular know-how, expertise or specialist capacity that customers may advocate to others as a reason for doing business with you.

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This video is from the free online course:

SMEs and New Markets: Trade, the Chinese Powerhouse and Online Opportunities

Deakin University